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Tuesday, 20 August 2013

Black Iron selects EPCM contractor for Shymanivske

Black Iron Inc. (TSE:BKI) took another step in the advancement of its Shymanivske iron ore project with the selection, announced Tuesday, of a contractor to fill the role of main Engineering, Procurement and Construction Management (EPCM) contractor on the Ukrainian site.

The Toronto-based iron ore exploration and development company also released initial work activities for the project.

The contractor selected, Fluor Transworld Services Inc., a subsidiary of Fluor Corporation, was chosen after a comprehensive proposal process. Texas-based Fluor comes with extensive international experience that spans all aspects of EPCM and a track record of delivering major "pit to port" iron ore projects.

In a statement released with the announcement, the company said “Fluor is a world leader in delivering iron ore projects and was chosen based on a number of criteria which included: global experience and reputation, technical, project management and logistics expertise, depth of resources, construction know-how and health, safety and environmental excellence.”

The company was also influenced by Fluor’s experience operating in the former Soviet Union and Eastern Europe, where it already has offices in Russia and Poland with plans to establish a project office in Ukraine.

Black Iron, engaged in the advancement of its project located in Kryviy Rih, Ukraine to production announced a completed NI 43-101 compliant bankable feasibility study on the project late in 2012 which outlines an operation producing 9.2 million tonnes per year of high-grade 68 per cent iron ore concentrate, projecting a 45.9 per cent internal rate of return, $3.5 billion net present value at an 8 per cent discount rate and 2.2 year payback for a capital investment of $1.1 billion.

The project is surrounded by five other operating mines, including ArcelorMittal's iron ore complex. Black Iron is also mindful of the area’s existing infrastructure, including access to power, rail and port facilities, which, when coupled with locally available skilled labour, is likely to contribute to a relatively quick development timeline to production.

The Shymanivske iron ore project contains an NI 43-101 compliant resource, with 646 million tonnes (Mt) of measured and indicated mineral resources. The company also holds an exploration permit for the adjacent Zelenivske project, which it intends to explore in the future.

"This is an important milestone for Black Iron as we move from the final project evaluation stage and prepare to formally commence detailed design and construction of the Shymanivske Iron Ore Mining Complex, said Black Iron president and CEO, Matt Simpson of the selection.

“Fluor's comprehensive capacity and broad experience in all aspects of detailed engineering, procurement and construction management, coupled with their skills in contract administration, safety, and environmental best practices, will be invaluable to successfully developing the Project."

Stock in the miner was trading up the day before the announcement, adding half a cent on the Toronto Stock Exchange to close up at 18.5 cents per share, an increase of more than 2 per cent.